[Federal Register Volume 75, Number 83 (Friday, April 30, 2010)]
[Notices]
[Pages 22792-22804]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-10155]


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FEDERAL COMMUNICATIONS COMMISSION

[AU Docket No. 10-31; DA 10-524]


Closed Auction of Broadcast Construction Permits Scheduled for 
July 20, 2010; Notice and Filing Requirements, Minimum Opening Bids, 
Upfront Payments, and Other Procedures for Auction 88

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: This document announces the procedures and minimum opening 
bids for the upcoming auction of identified Broadcast construction 
permits (Auction 88). This document is intended to familiarize 
prospective bidders with the procedures and minimum opening bids for 
the auction.

DATES: Applications to participate in Auction 88 must be filed prior to 
6 p.m. Eastern Time (ET) on May 13, 2010. Bidding for construction 
permits in Auction 88 is scheduled to begin on July 20, 2010.

FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau, 
Auctions and Spectrum Access Division: For legal questions: Lynne Milne 
or Howard Davenport at (202) 418-0660. For general auction questions: 
Jeff Crooks at (202) 418-0660 or Linda Sanderson at (717) 338-2868. 
Media Bureau, Audio Division: For licensing information and service 
rule questions: Lisa Scanlan or Tom Nessinger at (202) 418-2700. To 
request materials in accessible formats (Braille, large print, 
electronic files or audio format) for people with disabilities, send an 
e-mail to <a href="/cdn-cgi/l/email-protection#cfa9acacfafffb8fa9acace1a8a0b9"><span class="__cf_email__" data-cfemail="33555050060307735550501d545c45">[email protected]</span></a> or call the Consumer and Governmental Affairs 
Bureau at (202) 418-0530 or (202) 418-0432 (TTY).

SUPPLEMENTARY INFORMATION: This is a summary of the Auction 88 
Procedures Public Notice, which was released on March 31, 2010. The 
complete text of the Auction 88 Procedures Public Notice, including 
attachments, as well as related Commission documents, are available for 
public inspection and copying from 8 a.m. to 4:30 p.m. ET Monday 
through Thursday and from 8 a.m. to 11:30 a.m. ET on Friday in the FCC 
Reference Information Center, 445 12th Street, SW., Room CY-A257, 
Washington, DC 20554. The Auction 88 Procedures Public Notice and 
related Commission documents may also be purchased from the 
Commission's duplicating contractor, Best Copy and Printing, Inc. 
(BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 
20554, telephone 202-488-5300, facsimile 202-488-5563, or Web site: 
http://www.BCPIWEB.com, using document number DA 10-524 for the Auction 
88 Procedures Public Notice. The Auction 88 Procedures Public Notice 
and related documents are also available on the Internet at the 
Commission's Web site: http://wireless.fcc.gov/auctions/88/.

I. General Information

A. Introduction

    1. The Wireless Telecommunications Bureau and the Media Bureau 
(collectively, the Bureaus) announce the procedures and minimum opening 
bid amounts for the upcoming closed auction of certain broadcast AM, 
FM, and FM Translator construction permits. This auction, which is 
designated as Auction 88, is scheduled to commence on July 20, 2010. 
Auction 88 is a closed auction; only those entities listed in 
Attachment A of the Auction 88 Procedures Public Notice will be 
eligible to participate in this auction. On February 4, 2010, the 
Bureaus released a public notice seeking comment on competitive bidding 
procedures to be used in Auction 88. Interested parties submitted six 
comments and one reply comment in response to the Auction 88 Comment 
Public Notice, 75 FR 8070, Feb. 23, 2010.

B. Construction Permits in Auction 88

    2. Auction 88 will offer construction permits for 13 commercial 
full-power FM stations, one commercial FM translator station, and one 
commercial AM station as listed in Attachment A of the Auction 88 
Procedures Public Notice. The Bureaus explained that, due to a database 
error, the channel for the Rosendale, New York, FM allotment 
(construction permit MM-FM750-273A) was listed in Attachment A to the 
Auction 88 Comment Public Notice as Channel 273A, when in fact the 
correct channel (as reflected in Attachment A of the Auction 88 
Procedures Public Notice) is Channel 255A at Rosendale. Accordingly, 
the winning bidder for the Rosendale permit will be required to amend 
its application to specify operation on Channel 255. In Auction 88, the 
construction permit will be referred to as MM-FM750-255A. Despite 
commenter suggestions that the Commission should postpone conducting 
any auction for a permit for the FM Channel 251A allotment at Santa 
Isabel, Puerto Rico, on the basis of uncertainties concerning technical 
issues that may pose difficulties in implementing broadcast operations 
on this channel, the Bureaus will offer this permit in Auction 88.
    3. Attachment A of the Auction 88 Procedures Public Notice 
identifies the closed groups of mutually exclusive applications for 
each construction permit in this auction. Four applicants notified the 
Bureaus that changes to the applicant's name occurred after the 
original construction permit application had been filed. 
Notwithstanding notification of such a change through paper-filed 
application amendments, the Commission databases were never updated to 
reflect the new applicant name. Consequently, these applicants were 
listed under the original applicant name in the Auction 88 Comment 
Public Notice. Attachment A of the Auction 88 Procedures Public Notice 
reflects the name changes for the following four applicants: (i) BBK 
Broadcasting, Inc. to Radio Plus, Inc., (ii) Directel Inc. to SCHC 
Lubbock Application, Inc., (iii) Music Express Broadcasting, Inc. to 
Music Express Broadcasting Corp., and (iv) Rosen Broadcasting, Inc. to 
CHET-5 Broadcasting, L.P.
    4. An applicant listed in Attachment A of the Auction 88 Procedures 
Public Notice may become qualified to bid only if it meets the filing, 
qualification and payment requirements. Each qualified bidder will be 
eligible to bid on only those construction permits specified for that 
qualified bidder in Attachment A of the Auction 88 Procedures Public 
Notice. All applicants within these groups of mutually exclusive 
applications (MX groups) are directly mutually exclusive with one 
another; therefore no more than one construction permit will be awarded 
for each MX group.
i. Dismissal of Applications for Failure To Submit FRN
    5. The Auction 88 Comment Public Notice established a deadline for 
the submission to the Commission of an FCC Registration Number (FRN) by 
each applicant, and warned of disqualification from participation in 
the auction and dismissal of any application where the applicant failed 
to provide its FRN by the deadline on March 12, 2010. Attachment B of 
the Auction 88 Procedures Public Notice

[[Page 22793]]

lists applications that were dismissed as a result of the applicant's 
failure to submit the requested FRN by the specified deadline.
    6. Due to these dismissals, some applications no longer were 
mutually exclusive with other applications and are included in 
Attachment C of the Auction 88 Procedures Public Notice. The removal of 
applications in some cases has resulted in the removal of entire MX 
groups from the auction. Specifically, the failure by an applicant to 
submit its FRN by the specified deadline resulted in the removal from 
this auction of two MX groups: An MX group for an AM station at 
Lansing/South Hill, New York (construction permit MM-AM041-750) and an 
MX group for an FM translator at Manahawkin/Warren Grove, New Jersey 
(construction permit MM-FMT010-273).
ii. Dismissal of Applications for Failure To Submit Required Section 
307(b) Information
    7. AM applications in each of the two Indiana MX groups originally 
scheduled for this auction proposed to serve different communities. In 
order to make the evaluation required by 47 U.S.C. 307(b), the Media 
Bureau directed each applicant in closed MX group MM-AM039-640 and MX 
group MM-AM040-1230 to submit section 307(b) information. Attachment B 
of the Auction 88 Procedures Public Notice lists applications that no 
longer will be included in Auction 88 as a result of the applicant's 
failure to submit information needed for determinations required by 
section 307(b).
    8. With respect to MX group MM-AM039-640, only three applicants 
submitted Section 307(b) showings. Having found no dispositive section 
307(b) preference for either of the communities specified, these three 
applicants will be included in Auction 88 as MX group MM-AM039-640. 
With respect to MX group MM-AM040-1230, one applicant submitted a 
timely section 307(b) showing. Therefore, the engineering proposal for 
this construction permit no longer was mutually exclusive with other 
application engineering proposals and is listed as a singleton in 
Attachment C of the Auction 88 Procedures Public Notice. The Media 
Bureau dismissed the short-form applications (FCC Form 175) of the 
remaining five applicants in the MX group. All six MX group MM-AM040-
1230 applications were removed from Auction 88.

C. Rules and Disclaimers

i. Relevant Authority
    9. Prospective applicants must familiarize themselves thoroughly 
with the Commission's general competitive bidding rules, including 
recent amendments and clarifications, as well as Commission decisions 
in proceedings regarding competitive bidding procedures, application 
requirements, broadcast service rules and obligations of Commission 
licensees. It is the responsibility of all applicants to remain current 
with all Commission rules and with all public notices pertaining to 
this auction. The terms contained in the Commission's rules, relevant 
orders, and public notices are not negotiable. The Commission may amend 
or supplement information contained in its public notices at any time.
ii. Prohibited Communications and Compliance With Antitrust Laws
    10. To ensure the competitiveness of the auction process, 47 CFR 
1.2105(c) prohibits auction applicants for construction permits in any 
of the same geographic license areas from communicating with each other 
about bids, bidding strategies, or settlements unless such applicants 
have identified each other on their short-form applications (FCC Form 
175) as parties with whom they have entered into agreements pursuant to 
47 CFR 1.2105(a)(2)(viii).
a. Entities Subject to Section 1.2105
    11. Unless applicants have identified each other on their short-
form applications seeking to participate in a Commission auction as 
parties with whom they have entered into agreements under 47 CFR 
1.2105(a)(2)(viii), applicants for any of the same geographic license 
areas must affirmatively avoid all communications with or disclosures 
to each other that affect or have the potential to affect bids or 
bidding strategy. In some instances, this prohibition extends to 
communications regarding the post-auction market structure. This 
prohibition applies to all applicants regardless of whether such 
applicants become qualified bidders or actually bid. The geographic 
license area is the market designation of the particular service. For 
the FM service, the market designation is the particular vacant FM 
allotment (e.g., Greenwood, Arkansas, Channel 268A, MM-FM744-268A). In 
Auction 88, the rule would apply to applicants designated in Attachment 
A of the Auction 88 Procedures Public Notice for any of the same 
allotments or permits.
    12. Applicants are also reminded that, for purposes of this 
prohibition on certain communications, 47 CFR 1.2105(c)(7)(i) defines 
applicant as including all officers and directors of the entity 
submitting a short-form application to participate in the auction, all 
controlling interests of that entity, as well as all holders of 
partnership and other ownership interests and any stock interest 
amounting to 10 percent or more of the entity, or outstanding stock, or 
outstanding voting stock of the entity submitting a short-form 
application. For example, where an individual served as an officer for 
two or more applicants, the Bureaus have found that the bids and 
bidding strategies of one applicant are necessarily conveyed to the 
other applicant, and, absent a disclosed bidding agreement, an apparent 
violation of 47 CFR 1.2105(c) occurs.
    13. Individuals and entities subject to 47 CFR 1.2105(c) should 
take special care in circumstances where their employees may receive 
information directly or indirectly from a competing applicant relating 
to any competing applicant's bids or bidding strategies. Moreover, 
Auction 88 applicants are encouraged not to use the same individual as 
an authorized bidder. A violation of 47 CFR 1.2105(c) could occur if an 
individual acts as the authorized bidder for two or more competing 
applicants, and conveys information concerning the substance of bids or 
bidding strategies between such applicants. Also, if the authorized 
bidders are different individuals employed by the same organization 
(e.g., law firm or engineering firm or consulting firm), a violation 
similarly could occur. In such a case, at a minimum, applicants should 
certify on their applications that precautionary steps have been taken 
to prevent communication between authorized bidders and that applicants 
and their bidding agents will comply with 47 CFR 1.2105(c).
b. Prohibition Applies Until Down Payment Deadline
    14. 47 CFR 1.2105(c)'s prohibition on certain communications begins 
at the short-form application filing deadline and ends at the down 
payment deadline after the auction, which will be announced in a future 
public notice.
c. Prohibited Communications
    15. Applicants should note that they must not communicate directly 
or indirectly about bids or bidding strategy to other applicants in 
this auction. 47 CFR 1.2105(c) prohibits not only a communication about 
an applicant's own bids or bidding strategy, but also a

[[Page 22794]]

communication of another applicant's bids or bidding strategy. While 47 
CFR 1.2105(c) does not prohibit business negotiations among auction 
applicants, applicants must remain vigilant so as not to communicate 
directly or indirectly information that affects, or could affect, bids 
or bidding strategy, or the negotiation of settlement agreements.
    16. The Commission remains vigilant about prohibited communications 
taking place in other situations. For example, the Commission has 
warned that prohibited communications concerning bids and bidding 
strategies may include communications regarding capital calls or 
requests for additional funds in support of bids or bidding strategies 
to the extent such communications convey information concerning the 
bids and bidding strategies directly or indirectly. Applicants are 
hereby placed on notice that public disclosure of information relating 
to bids, or bidding strategies, or to post-auction market structures 
may violate 47 CFR 1.2105(c), including an applicant's use of the 
Commission's bidding system or a statement to the press, financial 
analyst or others.
d. Disclosure of Bidding Agreements and Arrangements
    17. The Commission's rules do not prohibit applicants from entering 
into otherwise lawful bidding agreements before filing their short-form 
applications, as long as they disclose the existence of the 
agreement(s) in their short-form applications. If parties agree in 
principle on all material terms prior to the short-form application 
filing deadline, each party to the agreement must identify the other 
party or parties to the agreement on its short-form application under 
47 CFR 1.2105(c), even if the agreement has not been reduced to 
writing. If the parties have not agreed in principle by the short-form 
filing deadline, they should not include the names of parties to 
discussions on their applications, and they may not continue 
negotiations, discussions or communications with any other applicants 
after the short-form application filing deadline.
e. Section 1.2105(c) Certification
    18. By electronically submitting a short-form application, each 
applicant in Auction 88 certifies its compliance with 47 CFR 1.2105(c) 
and 73.5002. However, the Bureaus caution that merely filing a 
certifying statement as part of an application will not outweigh 
specific evidence that a prohibited communication has occurred, nor 
will it preclude the initiation of an investigation when warranted. The 
Commission has stated that it intends to scrutinize carefully any 
instances in which bidding patterns suggest that collusion may be 
occurring. Any applicant found to have violated 47 CFR 1.2105(c) may be 
subject to sanctions.
f. Duty To Report Prohibited Communications: Reporting Procedure
    19. 47 CFR 1.2105(c)(6) provides that any applicant that makes or 
receives a communication that appears to violate 47 CFR 1.2105(c) must 
report such communication in writing to the Commission immediately, and 
in no case later than five business days after the communication 
occurs. The Commission has clarified that each applicant's obligation 
to report any such communication continues beyond the five-day period 
after the communication is made, even if the report is not made within 
the five-day period.
    20. To maintain the accuracy and completeness of information 
furnished in its pending application and to notify the Commission of 
any substantial change that may be of decisional significance to that 
application, an applicant is required by 47 CFR 1.65 to report to the 
Commission any communication the applicant has made to or received from 
another applicant after the short-form application filing deadline that 
affects or has the potential to affect bids or bidding strategy, unless 
such communication is made to or received from a party to an agreement 
identified under 47 CFR 1.2105(a)(2)(viii).
    21. 47 CFR 1.65(a) and 1.2105(c) require applicants in competitive 
bidding proceedings to furnish additional or corrected information 
within five days of a significant occurrence, or to amend their short-
form applications no more than five days after the applicant becomes 
aware of the need for amendment. A party reporting any communication 
pursuant to 47 CFR 1.65, 1.2105(a)(2), or 1.2105(c)(6) must take care 
to ensure that any reports of prohibited communications do not 
themselves give rise to a violation of 47 CFR 1.2105(c). For example, a 
party's report of a prohibited communication could violate the rule by 
communicating prohibited information to other applicants through the 
use of Commission filing procedures that would allow such materials to 
be made available for public inspection.
    22. To minimize the risk of inadvertent dissemination of 
information in such reports, any reports required by 47 CFR 1.2105(c) 
must be filed consistent with the instructions set forth in the Auction 
88 Procedures Public Notice. For Auction 88, such reports should be 
filed with the Chief of the Auctions and Spectrum Access Division, 
Wireless Telecommunications Bureau, by the most expeditious means 
available. Specifically, any such report should be submitted by e-mail 
at the following address: <a href="/cdn-cgi/l/email-protection#55342036213c3a3b6d6d153336367b323a23"><span class="__cf_email__" data-cfemail="e7869284938e8889dfdfa7818484c9808891">[email protected]</span></a>, or delivered to the 
following address: Margaret W. Wiener, Chief, Auctions and Spectrum 
Access Division, Wireless Telecommunications Bureau, Federal 
Communications Commission, 445 12th Street, SW., Room 6423, Washington, 
DC 20554.
    23. A party seeking to report such prohibited communications should 
consider submitting its report with a request that the report or 
portions of the submission be withheld from public inspection pursuant 
to 47 CFR 0.459. Such filers must have a cover page that prominently 
displays that confidential treatment is sought for the document, 
covering all of the material to which the request applies. Such parties 
also are encouraged to coordinate with the Auctions and Spectrum Access 
Division staff if they have any questions about the procedures for 
submitting such reports.
g. Winning Bidders Must Disclose Terms of Agreements
    24. Applicants that are winning bidders will be required to 
disclose in their long-form applications the specific terms, 
conditions, and parties involved in any bidding consortia, joint 
venture, partnership; or agreement, understanding, or other arrangement 
entered into relating to the competitive bidding process. Applicants 
must be aware that failure to comply with the Commission's rules can 
result in enforcement action.
h. Antitrust Laws
    25. Applicants are also reminded that, regardless of compliance 
with the Commission's rules, they remain subject to the antitrust laws, 
which are designed to prevent anticompetitive behavior in the 
marketplace. Compliance with the disclosure requirements of 47 CFR 
1.2105(c) will not insulate a party from enforcement of the antitrust 
laws. For instance, a violation of the antitrust laws could arise out 
of actions taking place well before any party submitted a short-form 
application. If an applicant is found to have violated the antitrust 
laws or the Commission's rules in connection with its participation in 
the competitive bidding process, it may be subject to forfeiture of its 
upfront payment, down payment or full bid amount and may be prohibited 
from participating in future

[[Page 22795]]

auctions, among other sanctions. See 47 CFR 1.2109(d).
iii. Due Diligence
    26. The burden of due diligence is on the auction applicant. 
Potential applicants are reminded that they are solely responsible for 
investigating and evaluating all technical and marketplace factors that 
may have a bearing on the value of the construction permits for 
broadcast facilities they are seeking in this auction. It is each 
applicant's responsibility to assure itself that, if it wins a 
construction permit in this auction, it will be able to build and 
operate facilities in accordance with the Commission's rules. The 
Commission does not represent or warrant that licenses or permits 
offered are suitable for any particular service, nor does a Commission 
construction permit or license constitute a guarantee of business 
success.
iv. Use of Integrated Spectrum Auction System
    27. The Commission will make available a browser-based bidding 
system to allow bidders to participate in Auction 88 over the Internet 
using the Commission's Integrated Spectrum Auction System (ISAS or FCC 
Auction System). The Commission makes no warranty whatsoever with 
respect to the FCC Auction System. In no event shall the Commission, or 
any of its officers, employees, or agents, be liable for any damages 
whatsoever (including, but not limited to, loss of business profits, 
business interruption, loss of business information, or any other loss) 
arising out of or relating to the existence, furnishing, functioning, 
or use of the FCC Auction System that is accessible to qualified 
bidders in connection with this auction. Moreover, no obligation or 
liability will arise out of the Commission's technical, programming, or 
other advice or service provided in connection with the FCC Auction 
System.
v. Environmental Review Requirements
    28. Permittees or licensees must comply with the Commission's rules 
regarding implementation of the National Environmental Policy Act and 
other Federal environmental statutes. The construction of a broadcast 
facility is a Federal action and the permittee or licensee for each 
such facility must comply with the Commission's environmental rules, 47 
CFR 1.1301-1.1319.

D. Auction Specifics

i. Auction Start Date
    29. Bidding in Auction 88 will begin on Tuesday, July 20, 2010. The 
initial schedule for bidding will be announced by public notice at 
least one week before the start of the auction. Unless otherwise 
announced, bidding on all construction permits will be conducted on 
each business day until bidding has stopped on all construction 
permits.
ii. Bidding Methodology
    30. The bidding methodology for Auction 88 will be simultaneous 
multiple round (SMR) bidding. The Commission will conduct this auction 
over the Internet using the FCC Auction System, and telephonic bidding 
will be available as well. Qualified bidders are permitted to bid 
electronically via the Internet or by telephone. All telephone calls 
are recorded.
iii. Pre-Auction Dates and Deadlines
    31. The following dates and deadlines apply:

 
 
 
Auction Tutorial Available (via Internet)...  May 4, 2010.
Short-Form Application (FCC Form 175):
    Filing Window Opens.....................  May 4, 2010; 12 noon ET.
Short-Form Application (FCC Form 175):
    Filing Window Deadline..................  May 13, 2010; prior to 6 p.m. ET.
    Upfront Payments (via wire transfer)....  June 17, 2010; 6 p.m. ET.
    Mock Auction............................  July 16, 2010.
    Auction Begins..........................  July 20, 2010.
 

II. Short-Form Application (FCC Form 175) Requirements

A. General Information Regarding Short-Form Applications

    32. An application to participate in an FCC auction, referred to as 
a short-form application or FCC Form 175, provides information used in 
determining whether the applicant is legally, technically, and 
financially qualified to participate in Commission auctions for 
licenses or permits. Each applicant must take seriously its duties and 
responsibilities and carefully determine before filing an application 
that the applicant has the legal, technical and financial resources to 
participate in Auction 88, as well as construct and operate a broadcast 
station if the auction applicant becomes a licensee as a result of its 
participation in this auction. Eligibility to participate in bidding is 
based on the applicants' short-form applications and certifications 
under penalty of perjury, as well as their upfront payments.
    33. All applicants for AM stations listed in Attachment A of the 
Auction 88 Procedures Public Notice previously filed short-form 
applications in response to the Supplemental Terre Haute Window Notice. 
All applicants for FM stations listed in Attachment A of the Auction 88 
Procedures Public Notice previously filed long-form applications. All 
entities and individuals seeking construction permits in Auction 88 are 
required to file a new short-form application electronically via the 
FCC Auction System prior to 6 p.m. ET on May 13, 2010, following the 
procedures prescribed in Attachment D of the Auction 88 Procedures 
Public Notice, even if the applicant had previously filed a short-form 
application in response to the Supplemental Terre Haute Window Notice 
or a long-form application.
    34. Applicants bear full responsibility for submitting accurate, 
complete and timely short-form applications. All applicants must 
certify on their short-form applications under penalty of perjury that 
they are legally, technically, financially, and otherwise qualified to 
hold a license. Applicants should read the instructions set forth in 
Attachment D of the Auction 88 Procedures Public Notice carefully and 
should consult the Commission's rules to ensure that, in addition to 
the materials, all the information that is required under the 
Commission's rules is included with their short-form applications. 
Auction 88 applicants are reminded that they are not permitted by 47 
CFR 1.2105(b) to make major modifications to their applications as 
initially filed (whether long-form applications by applicants for FM 
stations or short-form applications by applicants for the AM station), 
including any change of their construction permit(s), any change of 
control of the applicant, or any change to claim eligibility for a 
higher percentage of bidding credit).
    35. Applicants also should note that submission of a short-form 
application (and any amendments thereto)

[[Page 22796]]

constitutes a representation by the certifying official that he or she 
is an authorized representative of the applicant, that he or she has 
read the form's instructions and certifications, and that the contents 
of the application, its certifications, and any attachments are true 
and correct. Applicants are not permitted to make major modifications 
to their applications; such impermissible changes include a change of 
the certifying official to the application. Submission of a false 
certification to the Commission may result in penalties, including 
monetary forfeitures, license forfeitures, ineligibility to participate 
in future auctions, and/or criminal prosecution.

B. Construction Permits in Short-Form Application

    36. Auction 88 will resolve pending closed groups of mutually 
exclusive applications. Participation in this auction is limited to 
those applicants and applications identified in Attachment A of the 
Auction 88 Procedures Public Notice. Qualifying applicants will be 
eligible to bid only on those construction permits for which the 
applicant's application is designated in the particular MX group 
specified in Attachment A of the Auction 88 Procedures Public Notice. 
Therefore, applicants will not select permits when filing the FCC Form 
175.

C. New Entrant Bidding Credit

    37. The Commission adopted a tiered New Entrant Bidding Credit for 
broadcast auction applicants with no, or very few, other media 
interests. The interests of the applicant, and of any individuals or 
entities with an attributable interest in the applicant, in other media 
of mass communications are considered when determining an applicant's 
eligibility for the New Entrant Bidding Credit. In Auction 88, the 
bidder's attributable interests are determined as of the short-form 
application filing deadline. Thus, the applicant's maximum new entrant 
bidding credit eligibility will be determined as of the short-form 
application filing deadline. Applicants intending to divest a media 
interest or make any other ownership changes, such as resignation of 
positional interests, in order to avoid attribution for purposes of 
qualifying for the New Entrant Bidding Credit must have consummated 
such divestment transactions or have completed such ownership changes 
by no later than the short-form filing deadline. Prospective bidders 
are reminded, however, that events occurring after the short-form 
filing deadline, such as the acquisition of attributable interests in 
media of mass communications, may cause diminishment or loss of the 
bidding credit, and must be reported immediately.
    38. Under traditional broadcast attribution rules, such as 47 CFR 
73.3555 Note 2, those entities or individuals with an attributable 
interest in a bidder include: (1) All officers and directors of a 
corporate bidder; (2) any owner of 5 percent or more of the voting 
stock of a corporate bidder; (3) all partners and limited partners of a 
partnership bidder, unless the limited partners are sufficiently 
insulated; and (4) all members of a limited liability company, unless 
sufficiently insulated. In cases where an applicant's spouse or close 
family member holds other media interests, such interests are not 
automatically attributable to the bidder. The Commission decides 
attribution issues in this context based on certain factors 
traditionally considered relevant. Applicants should note that the mass 
media attribution rules were revised in 1999.
    39. Bidders are also reminded that, by the New Entrant Bidding 
Credit Reconsideration Order, 64 FR 44856, Aug. 18, 1999, the 
Commission further refined the eligibility standards for the New 
Entrant Bidding Credit, judging it appropriate to attribute the media 
interests held by very substantial investors in, or creditors of, an 
applicant claiming new entrant status. Specifically, the attributable 
mass media interests held by an individual or entity with an equity 
and/or debt interest in an applicant shall be attributed to that bidder 
for purposes of determining its eligibility for the New Entrant Bidding 
Credit, if the equity and debt interests, in the aggregate, exceed 33 
percent of the total asset value of the applicant, even if such an 
interest is non-voting.
    40. In the Diversity Order, 73 FR 28361, May 16, 2008, the 
Commission relaxed the equity/debt plus (EDP) attribution standard, to 
allow for higher investment opportunities in entities meeting the 
definition of eligible entities. An eligible entity is defined in Note 
2(i) of 47 CFR 73.3555. Pursuant to the Diversity Order, the Commission 
will now allow the holder of an equity or debt interest in the 
applicant to exceed the above-noted 33 percent threshold without 
triggering attribution provided (1) the combined equity and debt in the 
eligible entity is less than 50 percent; or (2) the total debt in the 
eligible entity does not exceed 80 percent of the asset value, and the 
interest holder does not hold any equity interest, option, or promise 
to acquire an equity interest in the eligible entity or any related 
entity.
    41. Generally, media interests will be attributable for purposes of 
the New Entrant Bidding Credit to the same extent that such other media 
interests are considered attributable for purposes of the broadcast 
multiple ownership rules. However, attributable interests held by a 
winning bidder in existing low power television, television translator 
or FM translator facilities will not be counted among the bidder's 
other mass media interests in determining its eligibility for a New 
Entrant Bidding Credit. A medium of mass communications is defined in 
47 CFR 73.5008(b), and includes full service noncommercial educational 
stations, on both reserved and nonreserved channels.
i. Application Requirements
    42. In addition to the ownership information required pursuant to 
47 CFR 1.2112, applicants seeking a New Entrant Bidding Credit are 
required to establish on their short-form applications that they 
satisfy the eligibility requirements to qualify for the bidding credit. 
In those cases, a certification under penalty of perjury must be 
provided in completing the applicant's short-form application. An 
applicant claiming that it qualifies for a 35 percent New Entrant 
Bidding Credit must certify that neither it nor any of its attributable 
interest holders have any attributable interests in any other media of 
mass communications. An applicant claiming that it qualifies for a 25 
percent New Entrant Bidding Credit must certify that neither it nor any 
of its attributable interest holders has any attributable interests in 
more than three media of mass communications, and must identify and 
describe such media of mass communications.
ii. Bidding Credits
    43. Applicants that qualify for the New Entrant Bidding Credit, as 
specified in the applicable rule, are eligible for a bidding credit 
that represents the amount by which a bidder's winning bid is 
discounted. The size of a New Entrant Bidding Credit depends on the 
number of ownership interests in other media of mass communications 
that are attributable to the bidder-entity and its attributable 
interest-holders: (1) A 35 percent bidding credit will be given to a 
winning bidder if it, and/or any individual or entity with an 
attributable interest in the winning bidder, has no attributable 
interest in any other media of mass communications, as defined in 47 
CFR 73.5008; (2) a 25 percent

[[Page 22797]]

bidding credit will be given to a winning bidder if it, and/or any 
individual or entity with an attributable interest in the winning 
bidder, has an attributable interest in no more than three mass media 
facilities, as defined in 47 CFR 73.5008; and (3) no bidding credit 
will be given if any of the commonly owned mass media facilities serve 
the same area as the broadcast station proposed in the auction, as 
defined in 47 CFR 73.5007(b), or if the winning bidder, and/or any 
individual or entity with an attributable interest in the winning 
bidder, has attributable interests in more than three mass media 
facilities.
    44. To the extent that one commenter suggested that the criteria 
for the new entrant bidding credit be modified for Auction 88 with a 
request that the Bureaus allow a bidding credit for any applicant with 
no other broadcast facilities, the Bureaus are unable to adopt any such 
revision of existing bidding credit rules, that already provide that 
broadcast auction applicants with no attributable interests in media of 
mass communications may seek a 35 percent bidding credit, or to adopt 
new bidding credits based on other criteria. The Bureaus will implement 
for this auction the broadcast bidding credit criteria as adopted by 
the Commission in 47 CFR 73.5007-73.5008.
    45. Bidding credits are not cumulative; qualifying applicants 
receive either the 25 percent or the 35 percent bidding credit, but not 
both. Attributable interests are defined in 47 CFR 73.3555 and note 2 
of that section. Applicants should note that unjust enrichment 
provisions under 47 CFR 73.5007(c) apply to a winning bidder that 
utilizes a bidding credit and subsequently seeks to assign or transfer 
control of its license or construction permit to an entity not 
qualifying for the same level of bidding credit.

D. Disclosure of Bidding Arrangements

    46. Applicants will be required to identify in their short-form 
application all parties with whom they have entered into any 
agreements, arrangements, or understandings of any kind relating to the 
construction permits being auctioned, including any agreements relating 
to post-auction market structure.
    47. Applicants also will be required to certify under penalty of 
perjury in their short-form applications that they have not entered and 
will not enter into any explicit or implicit agreements, arrangements 
or understandings of any kind with any parties, other than those 
identified in the application, regarding the amount of their bids, 
bidding strategies, or the particular construction permits on which 
they will or will not bid. If an applicant has had discussions, but has 
not reached an agreement by the short-form application filing deadline, 
it should not include the names of parties to the discussions on its 
application and may not continue such discussions with any applicants 
after the deadline.
    48. After the filing of short-form applications, the Commission's 
rules do not prohibit a party holding a non-controlling, attributable 
interest in one applicant from acquiring an ownership interest in or 
entering into a joint bidding arrangement with other applicants, 
provided that: (1) The attributable interest holder certifies in 
accordance with 47 CFR 1.2105(c)(4)(i), (ii) that it has not and will 
not communicate with any party concerning the bids or bidding 
strategies of more than one of the applicants in which it holds an 
attributable interest, or with which it has entered into a joint 
bidding arrangement; and (2) the arrangements do not result in a change 
in control of any of the applicants. While 47 CFR 1.2105(c) does not 
prohibit non-auction-related business negotiations among auction 
applicants, applicants are reminded that certain discussions or 
exchanges could touch upon impermissible subject matters because they 
may convey pricing information and bidding strategies. Such subject 
areas include, but are not limited to, issues such as management sales, 
local marketing agreements, rebroadcast agreements, and other 
transactional agreements. Compliance with the disclosure requirements 
of 47 CFR 1.2105(c) will not insulate a party from enforcement of the 
antitrust laws.

E. Ownership Disclosure Requirements

    49. The ownership disclosure standards for the short-form 
application are prescribed in 47 CFR 1.2105 and 1.2112. Specifically, 
in completing the short-form application, all applicants will be 
required to fully disclose information on the real party- or parties-
in-interest and ownership structure of the applicant, including both 
direct and indirect ownership interests of 10 percent or more. Each 
applicant is responsible for information submitted in its short-form 
application being complete and accurate.
    50. For Auction 88, the ownership information must conform, in all 
material respects, to the ownership information appearing on the 
applicant's previously-filed long-form application (FM and FM 
translator applicants) or short-form application (AM applicants). 
Applicants are cautioned that the long-form application will be 
considered newly filed according to 47 CFR 1.2105(b)(2) and 
73.3573(a)(1) if the information submitted on the electronic short-form 
application reflects that there has been a change of control. In such a 
case, the applicant will not be eligible to participate in the auction. 
Accordingly, each applicant should carefully review any information 
automatically entered in its short-form application to confirm that it 
is complete and accurate as of the deadline for filing the short-form 
application.

F. Provisions Regarding Former and Current Defaulters

    51. Current defaulters or delinquents are not eligible to 
participate in Auction 88, but former defaulters or delinquents can 
participate so long as they are otherwise qualified and, make upfront 
payments that are fifty percent more than the normal upfront payment 
amounts. An applicant is considered a current defaulter or a current 
delinquent when it, any of its affiliates, any of its controlling 
interests, or any of the affiliates of its controlling interests, are 
in default on any payment for any Commission construction permit or 
license (including a down payment) or are delinquent on any non-tax 
debt owed to any Federal agency as of the filing deadline for short-
form applications. An applicant is considered a former defaulter or a 
former delinquent when it, any of its affiliates, any of its 
controlling interests, or any of the affiliates of its controlling 
interests, have defaulted on any Commission construction permit or 
license or been delinquent on any non-tax debt owed to any Federal 
agency, but have since remedied all such defaults and cured all of the 
outstanding non-tax delinquencies.
    52. On the short-form application, an applicant must certify under 
penalty of perjury that it, its affiliates, its controlling interests, 
and the affiliates of its controlling interests, as defined by 47 CFR 
1.2110 currently are not in default on any payment for a Commission 
construction permit or license (including down payments) and that it is 
not currently delinquent on any non-tax debt owed to any Federal 
agency. Each applicant must also state under penalty of perjury whether 
it, its affiliates, its controlling interests, and the affiliates of 
its controlling interests, have ever been in default on any Commission 
construction permit or license or have ever been delinquent on any non-
tax debt owed to any Federal agency. Prospective applicants are 
reminded that submission of a false

[[Page 22798]]

certification to the Commission is a serious matter that may result in 
severe penalties, including monetary forfeitures, license revocations, 
exclusion from participation in future auctions, and/or criminal 
prosecution. These statements and certifications are prerequisites to 
submitting an application to participate in an FCC auction.
    53. Applicants are encouraged to review the Bureaus' previous 
guidance on default and delinquency disclosure requirements in the 
context of the short-form application process. For example, it has been 
determined that, to the extent that Commission rules permit late 
payment of regulatory or application fees accompanied by late fees, 
such debts will become delinquent for purposes of 47 CFR 1.2105(a) and 
1.2106(a) only after the expiration of a final payment deadline. 
Therefore, with respect to regulatory or application fees, the 
provisions of 47 CFR 1.2105(a) and 1.2106(a) regarding default and 
delinquency in connection with competitive bidding are limited to 
circumstances in which the relevant party has not complied with a final 
Commission payment deadline. Parties are also encouraged to consult 
with the Commission's Office of Managing Director or the Wireless 
Telecommunications Bureau's Auctions and Spectrum Access Division staff 
if they have any questions about default and delinquency disclosure 
requirements.
    54. The Commission considers outstanding debts owed to the United 
States Government, in any amount, to be a serious matter. The 
Commission adopted rules, including a provision referred to as the red 
light rule, that implement the Commission's obligations under the Debt 
Collection Improvement Act of 1996, which governs the collection of 
claims owed to the United States. Under the red light rule, the 
Commission will not process applications and other requests for 
benefits filed by parties that have outstanding debts owed to the 
Commission. In the same rulemaking order, the Commission explicitly 
declared, however, that the Commission's competitive bidding rules are 
not affected by the red light rule. As a consequence, the Commission's 
adoption of the red light rule does not alter the applicability of any 
of the Commission's competitive bidding rules, including the provisions 
and certifications of 47 CFR 1.2105 and 1.2106, with regard to current 
and former defaults or delinquencies.
    55. Applicants are reminded, however, that the Commission's Red 
Light Display System, which provides information regarding debts 
currently owed to the Commission, may not be determinative of an 
auction applicant's ability to comply with the default and delinquency 
disclosure requirements of 47 CFR 1.2105. Thus, while the red light 
rule ultimately may prevent the processing of long-form applications by 
auction winners, an auction applicant's lack of current red light 
status is not necessarily determinative of its eligibility to 
participate in an auction or of its upfront payment obligation.
    56. Moreover, prospective applicants in Auction 88 should note that 
any long-form applications filed after the close of bidding will be 
reviewed for compliance with the Commission's red light rule, and such 
review may result in the dismissal of a winning bidder's long-form 
application. Applicants that have their long-form application dismissed 
will be deemed to have defaulted and will be subject to default 
payments under 47 CFR 1.2104(g) and 1.2109(c).

G. Optional Applicant Status Identification

    57. Applicants owned by members of minority groups and/or women, as 
defined in 47 CFR 1.2110(c)(3), and rural telephone companies, as 
defined in 47 CFR 1.2110(c)(4), may identify themselves regarding this 
status in filling out their short-form applications. This optional 
applicant status information is collected for statistical purposes only 
and assists the Commission in monitoring the participation in its 
auctions of designated entities, defined as small businesses, 
businesses owned by members of minority groups and/or women, and rural 
telephone companies.

H. Minor Modifications to Short-Form Applications

    58. After the deadline for filing initial applications, 47 CFR 
1.2105(b) specifies that an Auction 88 applicant is permitted to make 
only minor changes to its application. Permissible minor changes 
include, among other things, deletion and addition of authorized 
bidders (to a maximum of three) and revision of addresses and telephone 
numbers of the applicants and their contact persons. An applicant is 
not permitted to make a major modification to its application (e.g., 
change control of the applicant, change the certifying official, or 
claim eligibility for a higher percentage of bidding credit) after the 
initial application filing deadline. Thus, any change in control of an 
applicant, resulting from a merger, for example, will be considered a 
major modification to the applicant's application, which will 
consequently be dismissed. In this regard, the Bureaus reiterated that, 
even if an applicant's short-form application is dismissed, the 
applicant would remain subject to the communication prohibitions of 47 
CFR 1.2105(c) until the down payment deadline, which will be 
established after the auction closes.
    59. Moreover, after the filing window has closed, ISAS will not 
permit applicants to make certain changes, such as the applicant's 
legal classification. Applicants also may not change the community of 
license prior to auction. While one commenter's request for a change in 
the community of license from New Holstein, Wisconsin, to Chilton, 
Wisconsin is not procedurally proper at this time, the winning bidder 
for FM Channel 225A will have the opportunity, when it files its post-
auction FCC Form 301 application, to propose a new community of 
license, as long as the proposed change is mutually exclusive with the 
allotment and would represent a preferential arrangement of allotments.
    60. If an applicant wishes to make permissible minor changes to its 
short-form application, such changes should be made electronically to 
its short-form application using the FCC Auction System whenever 
possible. Applicants are reminded to click on the SUBMIT button in the 
FCC Auction System for the changes to be submitted and considered by 
the Commission. After the revised application has been submitted, a 
confirmation page will be displayed that states the submission time, 
submission date, and a unique file number.
    61. An applicant cannot use the FCC Auction System outside of the 
initial and resubmission filing windows to make changes to its short-
form application other than administrative changes (e.g. changing 
certain contact information or the name of an authorized bidder). If 
other permissible minor changes need to be made outside of these 
windows, the applicant must submit a letter briefly summarizing the 
changes and subsequently update its short-form application in ISAS once 
the system is available. Any letter describing changes to an 
applicant's short-form application should be submitted by e-mail to the 
following address: <a href="/cdn-cgi/l/email-protection#7f1e0a1c0b16101147473f191c1c51181009"><span class="__cf_email__" data-cfemail="bddcc8dec9d4d2d38585fddbdede93dad2cb">[email protected]</span></a>. The e-mail summarizing the 
changes must include a subject or caption referring to Auction 88 and 
the name of the applicant.
    62. Any application amendment and related statements of fact must 
be certified by (1) the applicant, if the applicant is an individual; 
(2) one of the partners if the applicant is a partnership; (3) an 
officer, director, or

[[Page 22799]]

duly authorized employee, if the applicant is a corporation; (4) a 
member who is an officer, if the applicant is an unincorporated 
association; (5) the trustee, if the applicant is an amateur radio 
service club; or (6) a duly elected or appointed official who is 
authorized to make such certifications under the laws of the applicable 
jurisdiction, if the applicant is a governmental entity.
    63. Applicants must not submit application-specific material 
through the Commission's Electronic Comment Filing System which was 
used for submitting comments regarding Auction 88.

I. Maintaining Current Information in Short-Form Applications

    64. 47 CFR 1.65 requires an applicant to maintain the accuracy and 
completeness of information furnished in its pending application and to 
notify the Commission within 30 days of any substantial change that may 
be of decisional significance to that application. Changes that cause a 
loss of or reduction in the percentage of bidding credit specified on 
the originally submitted application must be reported immediately. For 
example, if ownership changes result in the attribution of new interest 
holders that affect the applicant's qualifications for a new entrant 
bidding credit, such information must be clearly stated in the 
applicant's amendment. Events occurring after the application filing 
deadline, such as the acquisition of attributable interests in media of 
mass communications, may also cause diminishment or loss of the bidding 
credit, and must be reported immediately. If an amendment reporting 
substantial changes is a major amendment, as defined by 47 CFR 1.2105, 
the major amendment will not be accepted and may result in the 
dismissal of the application.
    65. After the application filing deadline, applicants may make only 
minor changes to their applications. Applicants must click on the 
SUBMIT button in the FCC Auction System for any changes to be submitted 
and considered by the Commission. If a submission in compliance with 47 
CFR 1.65 is needed outside of the initial and resubmission filing 
windows, applicants must submit a brief letter summarizing the changes 
in accordance with the instructions specified in the Auction 88 
Procedures Public Notice.

III. Pre-Auction Procedures

A. Online Auction Tutorial--Available May 4, 2010

    66. On Tuesday, May 4, 2010, the Commission will post an 
educational auction tutorial on the Auction 88 Web page for prospective 
bidders to familiarize themselves with the auction process. This online 
tutorial will provide information about pre-auction procedures, 
completing short-form applications, auction conduct, the FCC Auction 
Bidding System, auction rules, and broadcast services rules. The 
tutorial will also provide an avenue to ask FCC staff questions about 
the auction, auction procedures, filing requirements, and other matters 
related to this auction.
    67. The auction tutorial will be accessible from the FCC's Auction 
88 Web page at http://wireless.fcc.gov/auctions/88/ through an Auction 
Tutorial link. Once posted, this tutorial will remain available for 
reference in connection with the procedures outlined in the Auction 88 
Procedures Public Notice.

B. Short-Form Applications--Due Prior to 6 p.m. ET on May 13, 2010

    68. In order to be eligible to bid in this auction, applicants must 
first follow the procedures set forth in Attachment D of the Auction 88 
Procedures Public Notice to submit a short-form application (FCC Form 
175) electronically via the FCC Auction System. This short-form 
application must be submitted through the FCC Auction System prior to 6 
p.m. ET on May 13, 2010. Late applications will not be accepted. An 
applicant always must click on the SUBMIT button on the Certify & 
Submit screen to successfully submit its FCC Form 175 and any 
modification; otherwise the application or changes to the application 
will not be received or reviewed.

C. Application Processing and Minor Corrections

    69. After the deadline for filing FCC Form 175 applications, the 
Commission will process all timely submitted applications to determine 
which are complete, and subsequently will issue a public notice 
identifying (1) those applications that are complete; (2) those 
applications that are rejected; and (3) those applications that are 
incomplete because of minor defects that may be corrected. The public 
notice will include the deadline for resubmitting corrected 
applications.
    70. After the application filing deadline on May 13, 2010, 
applicants continue to be able to make only minor corrections to their 
applications. Applicants will not be permitted to make major 
modifications to their applications (e.g., change control of the 
applicant, change the certifying official, or claim eligibility for a 
higher percentage of bidding credit).
    71. Applicants should be aware the Commission staff will 
communicate only with an applicant's contact person or certifying 
official, as designated on the applicant's short-form application, 
unless the applicant's certifying official or contact person notifies 
the Commission in writing that applicant's counsel or other 
representative is authorized to speak on its behalf. Such 
authorizations may be sent by e-mail to <a href="/cdn-cgi/l/email-protection#19786c7a6d7076772121597f7a7a377e766f"><span class="__cf_email__" data-cfemail="42233721362b2d2c7a7a022421216c252d34">[email protected]</span></a>. In no event, 
however, will the FCC send registration materials to anyone other than 
the contact person listed on the applicant's FCC Form 175 or respond to 
a request for replacement registration materials from anyone other than 
an authorized bidder, contact person or certifying official listed on 
the applicant's FCC Form 175.

D. Upfront Payments--Due June 17, 2010

    72. In order to be eligible to bid in this auction, applicants must 
submit an upfront payment accompanied by an FCC Remittance Advice Form 
(FCC Form 159). The Bureaus note that all applicants for permits must 
make an upfront payment in order to qualify as a bidder and obtain a 
permit, whether or not any other applicant in their MX groups becomes a 
qualified bidder. An applicant must initiate the wire transfer through 
its bank, authorizing the bank to wire funds from the applicant's 
account to the Commission's auction payment lockbox bank, the U.S. Bank 
in St. Louis, Missouri. After completing its short-form application, an 
applicant will have access to an electronic version of the FCC Form 159 
that can be printed and sent by fax to U.S. Bank in St. Louis, 
Missouri. All upfront payments must be made as instructed in this 
Public Notice and must be received in the proper account at U.S. Bank 
before 6 p.m. ET on June 17, 2010.
i. Making Upfront Payments by Wire Transfer
    73. Wire transfer payments must be received before 6 p.m. ET on 
June 17, 2010. No other payment method is acceptable. The Commission 
will not accept checks, credit cards, or automated clearing house (ACH) 
payments. To avoid untimely payments, applicants should discuss 
arrangements (including bank closing schedules) with their bankers 
several days before they

[[Page 22800]]

plan to make the wire transfer, and allow sufficient time for the 
transfer to be initiated and completed before the deadline.
    74. At least one hour before placing the order for the wire 
transfer (but on the same business day), applicants must fax a 
completed FCC Form 159 (Revised 2/03) to U.S. Bank at (314) 418-4232. 
On the fax cover sheet, applicants should write Wire Transfer--Auction 
Payment for Auction 88. In order to meet the Commission's upfront 
payment deadline, an applicant's payment must be credited to the 
Commission's account for Auction 88 before the deadline. The applicant 
is responsible for obtaining confirmation from its financial 
institution that U.S. Bank has timely received its upfront payment and 
deposited it in the proper account.
    75. Please note the following information regarding upfront 
payments: (1) All payments must be made in U.S. dollars; (2) all 
payments must be made by wire transfer; (3) upfront payments for 
Auction 88 go to a lockbox number different from the lockboxes used in 
previous FCC auctions; and (4) failure to deliver a sufficient upfront 
payment as instructed by the specified deadline on June 17, 2010 will 
result in dismissal of the short-form application and disqualification 
from participation in the auction.
ii. FCC Form 159
    76. A completed FCC Remittance Advice Form (FCC Form 159, Revised 
2/03) must be faxed to U.S. Bank to accompany each upfront payment. 
Proper completion of FCC Form 159 is critical to ensuring correct 
crediting of upfront payments. Detailed instructions for completion of 
FCC Form 159 are included in Attachment E of the Auction 88 Procedures 
Public Notice. An electronic pre-filled version of the FCC Form 159 is 
available after submitting the FCC Form 175. Payers using the pre-
filled FCC Form 159 are responsible for ensuring that all of the 
information on the form, including payment amounts, is accurate. The 
FCC Form 159 can be completed electronically, but must be filed with 
U.S. Bank by fax.
iii. Upfront Payments and Bidding Eligibility
    77. Attachment A of the Auction 88 Procedures Public Notice sets 
forth minimum opening bids and upfront payments for permits being 
offered in this auction. Applicants must make upfront payments 
sufficient to obtain bidding eligibility on the construction permits on 
which they will bid. The amount of the upfront payment determines a 
bidder's initial bidding eligibility, the maximum number of bidding 
units on which a bidder may place bids. In order to bid on a particular 
construction permit, a qualified bidder must be identified as an 
applicant for the construction permit in Attachment A of the Auction 88 
Procedures Public Notice and must have a current eligibility level that 
meets or exceeds the number of bidding units assigned to that 
construction permit. At a minimum, therefore, an applicant's total 
upfront payment must be enough to establish eligibility to bid on at 
least one of the construction permits for which it is identified as an 
applicant in Attachment A of the Auction 88 Procedures Public Notice, 
or else the applicant will not be eligible to participate in the 
auction.
    78. An applicant does not have to make an upfront payment to cover 
all construction permits for which it is identified as an applicant in 
Attachment A of the Auction 88 Procedures Public Notice, but only 
enough to cover the maximum number of bidding units that are associated 
with construction permits on which the bidder wishes to place bids and 
hold provisionally winning bids at any given time. Provisionally 
winning bids are bids that would become final winning bids if the 
auction were to close after the given round.
    79. Some commenters requested reductions of minimum opening bids 
for specific construction permits which correspond to the specific 
upfront payments proposed by the Bureaus in the Auction 88 Comment 
Public Notice. To the extent that the Bureaus reduced minimum opening 
bid amounts, the corresponding upfront payment amount for that 
construction permit also was reduced. With these exceptions, the 
Bureaus adopted the upfront payments and bidding units proposed for 
each construction permit in Auction 88. Upfront payment amounts and 
bidding units are set forth in Attachment A of the Auction 88 
Procedures Public Notice.
    80. In calculating its upfront payment amount, an applicant should 
determine the maximum number of bidding units on which it may wish to 
be active (bid on or hold provisionally winning bids on) in any single 
round, and submit an upfront payment amount covering that number of 
bidding units. In order to make this calculation, an applicant should 
add together the bidding units for all construction permits on which it 
seeks to be active in any given round. Applicants should check their 
calculations carefully, as there is no provision for increasing a 
bidder's eligibility after the upfront payment deadline. Further, a 
qualified bidder's maximum eligibility will not exceed the sum of the 
bidding units associated with the total number of construction permits 
identified for that applicant in Attachment A of the Auction 88 
Procedures Public Notice. In some cases, a qualified bidder's maximum 
eligibility may be less than the amount of its upfront payment because 
the qualified bidder either has submitted an upfront payment that 
exceeds the total amount of bidding units associated with the 
construction permits identified for that applicant in Attachment A of 
the Auction 88 Procedures Public Notice or has previously been in 
default on a Commission construction permit or license or delinquent on 
non-tax debt owed to a Federal agency.
    81. As explained previously in the Auction 88 Procedures Public 
Notice, applicants that are former defaulters must pay upfront payments 
50 percent greater than non-former defaulters. If an applicant is a 
former defaulter, it must calculate its upfront payment for all of its 
identified construction permits by multiplying the number of bidding 
units on which it wishes to be active by 1.5. In order to calculate the 
number of bidding units to assign to former defaulters, the Commission 
will divide the upfront payment received by 1.5 and round the result up 
to the nearest bidding unit. If a former defaulter fails to submit a 
sufficient upfront payment to establish eligibility to bid on at least 
one of the construction permits designated for that applicant in 
Attachment A of the Auction 88 Procedures Public Notice, the applicant 
will not be eligible to participate in the auction.

E. Auction Registration

    82. Approximately ten days before the auction, the Bureaus will 
issue a public notice announcing all qualified bidders for the auction. 
Qualified bidders are those applicants with submitted FCC Form 175 
applications that are deemed timely-filed, accurate, and complete, 
provided that such applicants have timely submitted an upfront payment 
that is sufficient to qualify them to bid.
    83. All qualified bidders are automatically registered for the 
auction. Registration materials will be distributed prior to the 
auction by overnight mail. The mailing will be sent only to the contact 
person at the contact address listed in the FCC Form 175 and will 
include the SecurID[supreg] tokens that will be required to place bids, 
the Integrated Spectrum Auction System (ISAS) Bidder's Guide, and the 
Auction Bidder Line phone number. Qualified

[[Page 22801]]

bidders that do not receive this registration mailing will not be able 
to submit bids. Therefore, any qualified bidder that has not received 
this mailing by noon on Wednesday, July 14, 2010, should call (717) 
338-2868. Receipt of this registration mailing is critical to 
participating in the auction, and each applicant is responsible for 
ensuring it has received all of the registration material.
    84. In the event that SecurID[supreg] tokens are lost or damaged, 
only a person who has been designated as an authorized bidder, the 
contact person, or the certifying official on the applicant's short-
form application may request replacements. Qualified bidders requiring 
the replacement of these items must call Technical Support at (877) 
480-3201, option nine; (202) 414-1250; or (202) 414-1255 (TTY).

F. Remote Electronic Bidding

    85. The Commission will conduct this auction over the Internet, and 
telephonic bidding will be available as well. Only qualified bidders 
are permitted to bid. Each applicant should indicate its bidding 
preference--electronic or telephonic--on its FCC Form 175. In either 
case, each authorized bidder must have its own SecurID[supreg] token, 
which the Commission will provide at no charge. Each applicant with one 
authorized bidder will be issued two SecurID[supreg] tokens, while 
applicants with two or three authorized bidders will be issued three 
tokens. For security purposes, the SecurID[supreg] tokens, the 
telephonic bidding telephone number, and the Integrated Spectrum 
Auction System (ISAS) Bidder's Guide are only mailed to the contact 
person at the contact address listed on the FCC Form 175. Each 
SecurID[supreg] token is tailored to a specific auction. 
SecurID[supreg] tokens issued for other auctions or obtained from a 
source other than the FCC will not work for Auction 88.

G. Mock Auction--July 16, 2010

    86. All qualified bidders will be eligible to participate in a mock 
auction on Friday, July 16, 2010. The mock auction will enable 
qualified bidders to become familiar with the FCC Auction System prior 
to the auction. Participation by all bidders is strongly recommended. 
Details will be announced by public notice.

IV. Auction Event

    87. The first round of bidding for Auction 88 will begin on 
Tuesday, July 20, 2010. The initial bidding schedule will be announced 
in a public notice listing the qualified bidders, which is to be 
released approximately 10 days before the start of the auction.

A. Auction Structure

i. Simultaneous Multiple Round Auction
    88. All construction permits in Auction 88 will be auctioned in a 
single auction using the Commission's standard simultaneous multiple-
round auction format. This type of auction offers every construction 
permit for bid at the same time and consists of successive bidding 
rounds in which eligible bidders may place bids on individual 
construction permits. A bidder may bid on, and potentially win, any 
number of construction permits. Unless otherwise announced, bids will 
be accepted on all construction permits in each round of the auction 
until bidding stops on every construction permit.
ii. Eligibility and Activity Rules
    89. The Bureaus will use upfront payments to determine initial 
(maximum) eligibility (as measured in bidding units) for Auction 88. 
The amount of the upfront payment submitted by a bidder determines 
initial bidding eligibility, the maximum number of bidding units on 
which a bidder may be active. As noted earlier, each construction 
permit is assigned a specific number of bidding units listed in 
Attachment A of the Auction 88 Procedures Public Notice. Bidding units 
for a given construction permit do not change as prices rise during the 
auction. A bidder's upfront payment is not attributed to specific 
construction permits. Rather, a bidder may place bids on any of the 
construction permits for which it is designated an applicant in 
Attachment A of the Auction 88 Procedures Public Notice, as long as the 
total number of bidding units associated with those construction 
permits does not exceed its current eligibility. Eligibility cannot be 
increased during the auction; it can only remain the same or decrease. 
Thus, in calculating its upfront payment amount, an applicant must 
determine the maximum number of bidding units it may wish to bid on or 
hold provisionally winning bids on in any single round, and submit an 
upfront payment amount covering that total number of bidding units. At 
a minimum, an applicant's upfront payment must cover the bidding units 
for at least one of the construction permits for which it is designated 
an applicant in Attachment A of the Auction 88 Procedures Public 
Notice. The total upfront payment does not affect the total dollar 
amount a bidder may bid on any given construction permit.
    90. In order to ensure that an auction closes within a reasonable 
period of time, an activity rule requires bidders to bid actively 
throughout the auction, rather than wait until late in the auction 
before participating. Bidders are required to be active on a specific 
percentage of their current bidding eligibility during each round of 
the auction.
    91. A bidder's activity level in a round is the sum of the bidding 
units associated with any construction permits covered by new and 
provisionally winning bids. A bidder is considered active on a 
construction permit in the current round if it is either the 
provisionally winning bidder at the end of the previous bidding round 
or if it submits a bid in the current round.
    92. The eligibility and activity rules for Auction 88 require a 
bidder to be active on 100 percent of its current eligibility during 
each round of the auction. That is, a bidder must either place a bid or 
be a provisionally winning bidder during each round of the auction. 
Failure to maintain the requisite activity level will result in the use 
of an activity rule waiver, if any remain, or a reduction in the 
bidder's eligibility, possibly curtailing or eliminating the bidder's 
ability to place additional bids in the auction.
iii. Activity Rule Waivers
    93. In Auction 88, each bidder in the auction will be provided with 
three activity rule waivers. It is important for bidders to understand 
that applying a waiver is irreversible. Once a bidder submits a 
proactive waiver, the bidder cannot unsubmit the waiver even if the 
round has not yet ended.
iv. Auction Stopping Rules
    94. For Auction 88, the Bureaus will employ a simultaneous stopping 
rule approach. A simultaneous stopping rule means that all construction 
permits remain available for bidding until bidding closes 
simultaneously on all construction permits. More specifically, bidding 
will close simultaneously on all construction permits after the first 
round in which no bidder submits any new bids or applies a proactive 
waiver. The Bureaus also adopted alternative versions of the 
simultaneous stopping rule for Auction 88 as specified in the Auction 
88 Comment Public Notice. The Bureaus retained the discretion to 
exercise any of options with or without prior announcement during the 
auction.

[[Page 22802]]

v. Auction Delay, Suspension, or Cancellation
    95. By public notice or by announcement during the auction, the 
Bureaus may delay, suspend, or cancel the auction in the event of 
natural disaster, technical obstacle, administrative or weather 
necessity, evidence of an auction security breach or unlawful bidding 
activity, or for any other reason that affects the fair and efficient 
conduct of competitive bidding.

B. Bidding Procedures

i. Round Structure
    96. The initial schedule of bidding rounds will be announced in the 
public notice listing the qualified bidders, which is released 
approximately 10 days before the start of the auction. Each bidding 
round is followed by the release of round results. Multiple bidding 
rounds may be conducted in a given day.
    97. The Bureaus have the discretion to change the bidding schedule 
in order to foster an auction pace that reasonably balances speed with 
the bidders' need to study round results and adjust their bidding 
strategies. The Bureaus may increase or decrease the amount of time for 
the bidding rounds, the amount of time between rounds, or the number of 
rounds per day, depending upon bidding activity and other factors.
ii. Reserve Price and Minimum Opening Bids
    98. There will be no reserve price for the construction permits to 
be offered in Auction 88. In the Auction 88 Comment Public Notice, the 
Bureaus proposed minimum opening bids and corresponding upfront 
payments for the permits being offered in this auction. The Commission 
received several comments requesting a reduction of the proposed 
minimum opening bids for specific construction permits in this auction.
    99. A commenter requested a reduction from $25,000 to $7,500 of the 
minimum opening bid for the FM station construction permit for New 
Holstein, Wisconsin, alleging difficulty in finding transmitter sites. 
The Bureaus agreed that some reduction in the minimum opening bid was 
warranted and reduced the minimum opening bid for MM-FM755-225A to 
$15,000.
    100. A commenter sought to postpone any auction of the permit for 
Channel 251A at Santa Isabel, Puerto Rico. Recognizing the technical 
challenges that may be involved in implementing a broadcast operation 
with this permit, the Bureaus reduced the minimum opening bid for 
Channel 251A at Santa Isabel to $25,000.
    101. For the construction permits listed in Attachment A of the 
Auction 88 Procedures Public Notice, the Bureaus adopted the minimum 
opening bid amounts proposed in the Auction 88 Comment Public Notice, 
with the exception of the reduced minimum opening bid amounts for the 
New Holstein and Santa Isabel construction permits. The specific 
minimum opening bid amounts for the construction permits available in 
Auction 88 are set forth in Attachment A of the Auction 88 Procedures 
Public Notice.
iii. Bid Amounts
    102. If a bidder has sufficient eligibility to place a bid on the 
particular construction permit, an eligible bidder will be able to 
place a bid on a given construction permit in any of up to nine 
different amounts. The FCC Auction System interface will list the nine 
acceptable bid amounts for each construction permit. In the event of 
duplicate bid amounts due to rounding, the FCC Auction System will omit 
the duplicates and will list fewer acceptable bid amounts for the 
license. The Bureaus retained the discretion to change, on a 
construction permit by construction permit basis, the minimum 
acceptable bid amounts, the minimum acceptable bid percentage, the bid 
increment percentage, and the number of acceptable bid amounts if the 
Bureaus determine that circumstances so dictate, as well as the 
discretion to limit (a) the amount by which a minimum acceptable bid 
for a construction permit may increase compared with the corresponding 
provisionally winning bid, and (b) the amount by which an additional 
bid amount may increase compared with the immediately preceding 
acceptable bid amount.
iv. Provisionally Winning Bids
    103. At the end of each bidding round, a provisionally winning bid 
will be determined based on the highest bid amount received for each 
construction permit. A provisionally winning bid will remain the 
provisionally winning bid until there is a higher bid on the same 
construction permit at the close of a subsequent round. Provisionally 
winning bids at the end of the auction become the winning bids. Bidders 
are reminded that provisionally winning bids count toward activity for 
purposes of the activity rule.
    104. In Auction 88, a random number generator will be used to 
select a single provisionally winning bid in the event of identical 
high bid amounts being submitted on a construction permit in a given 
round (i.e., tied bids) as described in the Auction 88 Procedures 
Public Notice.
v. Bidding
    105. All bidding will take place remotely either through the FCC 
Auction System or by telephonic bidding. There will be no on-site 
bidding during Auction 88. Please note that telephonic bid assistants 
are required to use a script when entering bids placed by telephone. 
Telephonic bidders are therefore reminded to allow sufficient time to 
bid by placing their calls well in advance of the close of a round. The 
length of a call to place a telephonic bid may vary; please allow a 
minimum of ten minutes.
    106. A bidder's ability to bid on specific construction permits is 
determined by two factors: (1) The construction permits for which it is 
designated an applicant in Attachment A of the Auction 88 Procedures 
Public Notice and (2) the bidder's eligibility. The bid submission 
screens will allow bidders to submit bids on only those construction 
permits designated for that applicant in Attachment A of the Auction 88 
Procedures Public Notice.
    107. In order to access the bidding function of the FCC Auction 
System, bidders must be logged in during the bidding round using the 
passcode generated by the SecurID[supreg] token and a personal 
identification number created by the bidder. Bidders are strongly 
encouraged to print a round summary for each round after they have 
completed all of their activity for that round.
    108. If a bidder has sufficient eligibility to place a bid on a 
particular permit, an eligible bidder will be able in each round to 
place bids on a given construction permit in any of up to nine pre-
defined bid amounts. For each construction permit, the FCC Auction 
System will list the acceptable bid amounts in a drop-down box. Bidders 
use the drop-down box to select from among the acceptable bid amounts. 
The FCC Auction System also includes an upload function that allows 
bidders to upload text files containing bid information.
    109. Until a bid has been placed on a construction permit, the 
minimum acceptable bid amount for that construction permit will be 
equal to its minimum opening bid amount. Once there are bids on a 
construction permit, minimum acceptable bids for a construction permit 
for the following round will be determined as described in the Auction 
88 Procedures Public Notice.

[[Page 22803]]

    110. During a round, an eligible bidder may submit bids for as many 
construction permits as it wishes (providing that it is eligible to 
bid), remove bids placed in the current bidding round, or permanently 
reduce eligibility. If a bidder submits multiple bids for the same 
construction permit in the same round, the system takes the last bid 
entered as that bidder's bid for the round. Bidders should note that 
the bidding units associated with construction permits for which the 
bidder has removed bids do not count towards the bidder's current 
activity.
vi. Bid Removal and Bid Withdrawal
    111. In Auction 88, each bidder will have the option of removing 
any bids placed in a round provided that such bids are removed before 
the close of that bidding round. By using the remove bids function in 
the FCC Auction System, a bidder may effectively unsubmit any bid 
placed within that round. A bidder removing a bid placed in the same 
round is not subject to withdrawal payments. Removing a bid will affect 
a bidder's activity for the round in which it is removed, i.e., a bid 
that is removed does not count toward bidding activity.
    112. Once a round closes, a bidder may no longer remove a bid. In 
Auction 88, bidders are prohibited from withdrawing any bids after the 
round in which bids were placed has closed. Bidders are cautioned to 
select bid amounts carefully because no bid withdrawals will be allowed 
in Auction 88, even if a bid was mistakenly or erroneously made.
vii. Round Results
    113. Reports reflecting bidders' identities for Auction 88 will be 
available before and during the auction. Thus, bidders will know in 
advance of this auction the identities of the bidders against which 
they are bidding.
    114. Bids placed during a round will not be made public until the 
conclusion of that round. After a round closes, the Bureaus will 
compile reports of all bids placed, current provisionally winning bids, 
new minimum acceptable bid amounts for the following round, whether the 
construction permit is FCC held, and bidder eligibility status (bidding 
eligibility and activity rule waivers), and post the reports for public 
access.
viii. Auction Announcements
    115. The Commission will use auction announcements to announce 
items such as schedule changes. All auction announcements will be 
available by clicking a link in the FCC Auction System.

V. Post-Auction Procedures

    116. Shortly after bidding has ended, the Commission will issue a 
public notice declaring the auction closed, identifying the winning 
bidders, and establishing the deadlines for submitting down payments, 
final payments, and the long-form applications (FCC Forms 301 or 349).

A. Down Payments

    117. Within ten business days after release of the auction closing 
public notice, each winning bidder must submit sufficient funds (in 
addition to its upfront payment) to bring its total amount of money on 
deposit with the Commission for Auction 88 to 20 percent of the net 
amount of its winning bids (gross bids less any applicable new entrant 
bidding credits).

B. Final Payments

    118. Each winning bidder will be required to submit the balance of 
the net amount of its winning bids within ten business days after the 
applicable deadline for submitting down payments. In a departure from 
the final payment rule revision adopted for broadcast auctions in the 
CSEA/Part 1 Report and Order, 71 FR 6992, Feb. 10, 2006, a commenter 
proposed that any winning bidder with no other broadcast facilities be 
allowed to delay payment of the balance of its bid until the submission 
of its long-form application. The Bureaus are unable to modify this 
rule which was established by the Commission in a rulemaking 
proceeding. The balance of the net amount of each winning bid will be 
due within ten business days after the deadline for submitting down 
payments for this auction.

C. Long-Form Application (FCC Forms 301 or 349)

    119. The Commission's rules currently provide that within thirty 
days after release of the auction closing notice, winning bidders must 
electronically submit a properly completed long-form application (FCC 
Form 301, Application for Construction Permit for Commercial Broadcast 
Station, or FCC Form 349, Application for Authority to Construct or 
Make Changes in an FM Translator or FM Booster Station) and required 
exhibits for each construction permit won through Auction 88. Winning 
bidders claiming new entrant bidding status must include an exhibit 
demonstrating their eligibility for the bidding credit in accordance 
with 47 CFR 1.2112(b) and 73.5005. Further instructions on these and 
other filing requirements will be provided to winning bidders in the 
auction closing public notice.

D. Default and Disqualification

    120. Any winning bidder that defaults or is disqualified after the 
close of the auction (i.e., fails to remit the required down payment 
within the prescribed period of time, fails to submit a timely long-
form application, fails to make full payment, or is otherwise 
disqualified) will be subject to the payments described in 47 CFR 
1.2104(g)(2). The payments include both a deficiency payment, equal to 
the difference between the amount of the bidder's bid and the amount of 
the winning bid the next time a construction permit covering the same 
spectrum is won in an auction, plus an additional payment equal to a 
percentage of the defaulter's bid or of the subsequent winning bid, 
whichever is less.
    121. The percentage of the applicable bid to be assessed as an 
additional payment for defaults in a particular auction is established 
in advance of the auction. The additional default payment for this 
auction was set at twenty percent of the applicable bid.
    122. Finally, in the event of a default, the Commission has the 
discretion to re-auction the construction permit or offer it to the 
next highest bidder (in descending order) at its final bid amount. In 
addition, if a default or disqualification involves gross misconduct, 
misrepresentation, or bad faith by an applicant, the Commission may 
declare the applicant and its principals ineligible to bid in future 
auctions, and may take any other action that it deems necessary, 
including institution of proceedings to revoke any existing 
authorizations held by the applicant.

E. Refund of Remaining Upfront Payment Balance

    123. After the auction, applicants that are not winning bidders or 
are winning bidders whose upfront payment exceeded the total net amount 
of their winning bids may be entitled to a refund of some or all of 
their upfront payment. All refunds will be returned to the payer of 
record, as identified on the FCC Form 159, unless the payer submits 
written authorization instructing otherwise. Bidders that drop out of 
the auction completely (have exhausted all of their activity rule 
waivers and have no remaining bidding eligibility) may request a refund 
of their upfront

[[Page 22804]]

payments before the close of the auction.

William W. Huber,
Associate Chief, Auctions and Spectrum Access Division, WTB, Federal 
Communications Commission.
[FR Doc. 2010-10155 Filed 4-29-10; 8:45 am]
BILLING CODE 6712-01-P


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